Resource Allocation Based on Efficiency Analysis

Pekka Korhonen and Mikko Syrjänen ()
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Mikko Syrjänen: Helsinki School of Economics, P.O. Box 1210, 00101 Helsinki, Finland

Management Science, 2004, vol. 50, issue 8, 1134-1144

Abstract: The purpose of this paper is to develop an approach to a resource-allocation problem that typically appears in organizations with a centralized decision-making environment, for example, supermarket chains, banks, and universities. The central unit is assumed to be interested in maximizing the total amount of outputs produced by the individual units by allocating available resources to them. We will develop an interactive formal approach based on data envelopment analysis (DEA) and multiple-objective linear programming (MOLP) to find the most preferred allocation plan. The units are assumed to be able to modify their production in the current production possibility set within certain assumptions. Various assumptions are considered concerning returns to scale and the ability of each unit to modify its production plan. Numerical examples are used to illustrate the approach.

Keywords: resource allocation; data envelopment analysis; frontier analysis; multiple-objective linear programming (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (75)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:50:y:2004:i:8:p:1134-1144

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